Trump administration says it has cancelled most foreign aid contracts

WASHINGTON – President Donald Trump’s administration said in a court filing on Feb 26 that it has made final decisions terminating most US foreign aid contracts and grants, while maintaining that it cannot meet a court-ordered deadline of 11.59pm EST (12.59pm on Feb 27, Singapore time) to pay for past work.

The administration is cutting more than 90 per cent of the US Agency for International Development’s (USAid) foreign aid contracts and over US$58 billion (S$77.7 billion) in overall US assistance around the world, a State Department spokesperson said separately, calling the cuts part of Mr Trump’s “America First agenda”.

The filing on Feb 26 in federal court in Washington came in a pair of lawsuits brought by organisations that contract with or receive grants from USAid and the State Department, alleging that the agencies have illegally frozen all foreign aid payments.

The Trump administration has kept those payments largely frozen despite a Feb 13 temporary restraining order from US District Judge Amir Ali that they be released, and multiple subsequent orders that the administration comply, culminating in the night of Feb 26 deadline.

In a related development on Feb 26, the Trump administration asked the US Supreme Court to put Judge Ali’s order on hold. A federal appeals court in Washington, on the evening of Feb 26, denied the administration’s request to pause the judge’s order.

Lawyers for the US Justice Department have maintained that the administration has a right to suspend its agreements while it reviews them to determine whether they comply with administration policy.

That review is now complete, the administration said in its new filing. It said USAid has made final decisions to cancel nearly 5,800 awards, while keeping more than 500, and that the State Department has cancelled about 4,100 awards, while keeping about 2,700.

An administration official said in an earlier court filing that grounds for terminating contracts include that they were related to diversity, equity, inclusion and accessibility efforts, or were considered wasteful.

Mr Trump has taken a hard line on programmes related to diversity, equity and inclusion (DEI), signing an executive order in his second day in office in January directing federal agency chiefs to dismantle DEI policies.

The administration said on Feb 26 that Secretary of State Marco Rubio had ordered that past-due invoices from the plaintiffs for work before Jan 24, when the payment freeze began, be “expedited for payment without the ordinary vetting procedures, in a good-faith effort to comply” with Judge Ali’s order. It said that while some money would be paid on Feb 26, full payments could take weeks.

The filing comes as the administration has asked the District of Columbia Circuit Court of Appeals to put Judge Ali’s order on hold while the court hears the administration’s appeal.

Halt undermines relief efforts

Mr Trump, a Republican, ordered a 90-day pause on all foreign aid on his first day in office in January. That order, and ensuing stop-work orders halting USAid operations around the world, have jeopardised the delivery of life-saving food and medical aid, throwing global humanitarian relief efforts into chaos.

USAid administers some 60 per cent of US foreign assistance and disbursed US$43.79 billion in fiscal year 2023. According to a Congressional Research Service report in February, its workforce of 10,000, of which about two-thirds serves overseas, assisted about 130 countries.

Mr Trump’s administration on Feb 23 said it was placing all but leaders and critical staff at USAid on paid administrative leave and eliminating 1,600 positions. Employee unions have sued to challenge the cuts, though a judge last week allowed them to go ahead.

Judge Ali, who was appointed by Mr Trump’s Democratic predecessor, former president Joe Biden, issued his temporary restraining order to prevent irreparable harm to the plaintiffs while he considers their claims.

The plaintiffs allege Mr Trump has exceeded his authority under federal law and the US Constitution by effectively dismantling an independent agency and cancelling spending authorised by Congress.

The plaintiffs have said the administration has not done anything to comply with the restraining order, and some have said they will shut down within days if they are not paid.

“The lengths that the government is willing to go to flout a court order, all for the goal of ending life-saving humanitarian assistance, is staggering,” said Ms Allison Zieve, a lawyer representing two plaintiffs, Aids Vaccine Advocacy Coalition and Journalism Development Network, on Feb 26.

Other plaintiffs include international development company DAI Global and refugee assistance organisation HIAS.

Both Judge Ali and a Rhode Island federal judge in a separate case over a broader federal payment freeze have castigated the Trump administration for failing to follow their orders. The administration in both cases has maintained it is trying in good faith to interpret and comply with the orders. REUTERS